XML 34 R21.htm IDEA: XBRL DOCUMENT v3.22.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes
13.INCOME TAXES
Provision for Income Taxes
The Company and its subsidiaries are based in the U.S. and file federal and various state income tax returns. The components of the provision for income taxes were as follows:
Years Ended December 31,
202120202019
Current tax expense$3,472 $3,032 $1,182 
Deferred tax expense (benefit) 21,428 19,439 (27,398)
Income tax expense (benefit) $24,900 $22,471 $(26,216)
Due to the net operating loss carryforwards, the Company expects no cash payments for federal income taxes for 2021 and 2020. The Company makes cash payments for state income taxes in states in which the Company does not have net operating loss carry forwards.
Effective Tax Rate
The items comprising the difference between income taxes computed at the U.S. federal statutory rates in effect for 2021, 2020 and 2019 and our effective tax rates were as follows:
Years Ended December 31,
202120202019
Amount%Amount%Amount%
Tax expense at the U.S. federal statutory rate$18,905 21.0 %$13,729 21.0 %$3,041 21.0 %
State income taxes, net of federal benefits5,543 6.2 %5,149 7.9 %1,670 11.5 %
Taxes on subsidiaries’ and joint ventures’ earnings allocated to noncontrolling interests owners(521)(0.6)%(141)(0.2)%(2,241)(15.5)%
Valuation allowance— — %— — %(29,375)(202.9)%
Executive compensation, including stock incentives1,698 1.9 %1,881 2.9 %805 5.6 %
Other permanent differences(725)(0.8)%1,853 2.8 %(116)(0.8)%
Income tax expense (benefit) $24,900 27.7 %$22,471 34.4 %$(26,216)(181.1)%
The 2021 and 2020 effective income tax rate varied from the statutory rate primarily as a result of state income taxes, nondeductible compensation and other permanent differences. The 2019 effective income tax rate varied from the statutory rate primarily as a result of our reversal of the valuation allowance on our net deferred tax assets.
Deferred Tax Assets and Liabilities
The components of deferred tax assets and liabilities were as follows:
Long Term
As of December 31,
20212020
Assets related to:
Accrued compensation and other$5,322 $4,743 
Noncontrolling interests2,626 1,860 
Members interest liabilities9,209 9,131 
Right of use liabilities5,762 3,687 
Derivative Liability515 1,557 
Deferred Payments1,127 2,223 
Net operating loss carryforwards8,955 14,316 
Total deferred tax assets33,516 37,517 
Liabilities related to:
Depreciation of property and equipment(26,974)(16,490)
Right of use assets(5,727)(3,680)
Amortization of tax basis goodwill(10,772)(7,099)
Other(4,699)(2,431)
Total deferred tax liabilities(48,172)(29,700)
Net total deferred tax (liability) asset$(14,656)$7,817 
Net Operating Loss—At December 31, 2021 the Company had federal and state net operating loss (“NOL”) carryforwards of $33,780 and $32,064, respectively, which expire at various dates in the next 18 years for U.S. federal income tax and in the next 7 to 17 years for the various state jurisdictions where we operate. Such NOL carryforwards expire beginning in 2028 through 2039.
Valuation Allowance—The Company performs an analysis at the end of each reporting period to determine whether it is more likely than not deferred tax assets will be realized in future years. In performing its assessments in prior periods, a full valuation allowance was recorded as a result of objective negative evidence which included historical losses from 2013 to 2016 and the first quarter of 2017 and associated limits on ability to consider other subjective evidence such as projections for future growth. During 2019, the Company achieved eleven of the last twelve consecutive quarters of pre-tax income and is projecting sufficient future taxable income to be available to utilize all NOLs prior to their expiration. Deferred tax liabilities were a consideration in the analysis of whether to apply a valuation allowance because taxable temporary differences may be used as a source of taxable income to support the realization of deferred tax assets. A deferred tax liability that relates to an asset with an indefinite life, such as goodwill, may not be considered a source of income and should not be netted against deferred tax assets for valuation allowance purposes. As a result of this analysis, the Company believed that there was sufficient positive evidence that outweighed any negative evidence and therefore released the full valuation allowance in the fourth quarter of 2019.
Uncertain Tax Positions
As a result of the Company’s analysis, management has determined that the Company does not have any material uncertain tax positions. The Company’s U.S. federal income tax returns for 2019 and later years are open and subject to examination by the I.R.S. In addition, the Company’s state income tax returns for 2018 and later years are open and subject to examination. Additionally, federal and state NOLs may be adjusted by the taxing authorities for the 2013 and later tax years.